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29 October 2001
  Original: English


Report of the Panel


3. Procedural Arguments

(a) Korea Provides No Basis for the Panel to Request Confidential Business Information from the United States.

4.94 Korea asks the Panel to request immense quantities of confidential information from the United States. However, it has nowhere established that any of the information meets the Article 13.1 DSU requirement of being "necessary and appropriate" to the Panel's evaluation of Korea's claims. In fact, previous panels have recognized the need to avoid the use of confidential information, where possible. In this dispute, the non-confidential information on the Panel record is sufficient. If the Panel considers that it needs anything more, the United States is willing to meet the need with summaries or indexed data.

4.95 Most importantly, Korea has failed to state a prima facie case on any of its claims. Therefore, any request for confidential information at this stage would put the United States in the position of proving its measure consistent with the WTO Agreement when Korea has not yet established the existence of an inconsistency. This would entirely reverse the established burden of proof.

(b) Request of the United States for a Preliminary Ruling That Evidence Not Submitted to the ITC or Addressing Events After the Decision to Take a Safeguard Measure Is Not Admissible in This Proceeding

4.96 The United States requests that the Panel issue a preliminary ruling that certain information included in Korea's first written submission is inadmissible. First, several pieces of information in Korea's submission were not submitted to the ITC. If the Panel were to consider that information in its evaluation of the ITC determination, it would be conducting the sort of de novo review that the Appellate Body has consistently rejected. Second, Korea submitted and cited to information pertaining to the period after the United States took the decision to apply a safeguard measure. Under the Safeguards Agreement, both the determination of serious injury and the decision to apply a safeguard measure must be based on information available to the competent authorities or the Member at the time of the determination or decision. Therefore, that information is irrelevant to any evaluation of the line pipe safeguard measure.

4.97 Accordingly, the United States requests that the Panel rule that the information described in the preceding paragraph is inadmissible, that it request the removal of that information and arguments based on that information from Korea's first written submission, and that the Panel disregard that information and any arguments based on it.


4.98 The following is the Korea's own executive summary first oral statement:

1. Factual Background

4.99 The US line pipe industry, in the second half of 1998 and early 1999, faced a difficult situation. The industry had just enjoyed a peak demand period for 18 straight months; the industry built substantial new capacity to take advantage of that domestic increase in market demand; but demand plummeted when the oil and gas crisis hit. US line pipe industry performance began its recovery in the second quarter of 1999. Imports, however, continued to fall in the first half of 1999, a decline that had commenced in the second half of 1998.

2. Preliminary Issues

(a) Confidential Information

4.100 The 16 February letter of the United States confirms that Korea was absolutely correct that the public data regarding absolute import trends does not accurately reflect the trends of the confidential data. This is the reason that the Panel also needs the other confidential data identified in Korea's First Written Submission. The Panel is not obliged to frame its review and decision on the basis of the information the United States may choose to provide. The Panel should either apply adverse inferences to complete its review or find that the United States has failed to meet its burden of proof, depending on the issue.

(b) Judicial Economy

4.101 Korea urges the Panel to reach the issues of the safeguard measure even after the Panel finds errors in the ITC investigation. Otherwise, it would lead to dispute prolongation rather than dispute resolution. This authority is within the Panel's discretion.

3. Legal Arguments

(a) The Safeguard Measure

4.102 For reasons never made publicly available, the US President completely ignored the ITC's recommendations and imposed a remedy which was far more restrictive and in clear violation of many of the basic principles for safeguard remedies. The ITC had recommended a tariff-rate quota of 151,124 short tons with a 30 per cent tariff for over-quota imports. The President imposed a tariff-rate quota of 9,000 short tons per supplying country with a tariff of 19 per cent for over-quota entries. The President's measure was excessive.

4.103 The US measure, a tariff-rate quota, violates Articles XIII and XIX and Article 5. The US claim that Article XIII does not apply to a safeguard measure under the SA must be rejected. The WTO is a single treaty. As such, all provisions of the treaty must apply with full force and effect. Article II:2 of the WTO Agreement expresses the intention of the Uruguay Round negotiators that the provisions of the agreements included in Annexes 1, 2 and 3 must be read as a whole. The General Interpretative Note to Annex 1A of the WTO Agreement provides that "[i]n the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the Agreement, the provisions of the other agreement shall prevail to the extent of the conflict" (emphasis added). Certainly, no conflict exists between the SA and Articles XI and XIII.

4.104 The United States maintains that only the provisions of Article XIII which are specifically incorporated in the SA continue in force and effect and cites for its conclusion that the SA is a "comprehensive" agreement. But "comprehensive" does not mean "exclusive." In Argentina - Footwear , the Appellate Body specifically rejected the argument that since the SA did not contain the "unforeseen development" language found in Article XIX, this was an "express omission" from the SA. The same reasoning applies here. The preamble of the SA states that the object and purpose of the SA is to "clarify and reinforce the disciplines of GATT 1994" (emphasis added). While Article XIX is specifically mentioned in the SA, it is not exclusively mentioned - all the disciplines of the GATT 1994 are referenced. The object and purpose of the SA, set forth in the preamble, is to "re-establish multilateral control over safeguards and eliminate measures that escape such control." Yet the United States maintains that the Article XIII requirements regarding tariff-rate quotas were eliminated. If we were to follow the US argument, only tariff-rate quotas have escaped multilateral disciplines.

4.105 In any event, regardless of what form a safeguard measure takes, it must be "necessary to prevent or remedy serious injury and to facilitate adjustment" in accordance with Article 5.1 and Article XIX of the GATT 1994. In Korea - Dairy Safeguard, the Appellate Body upheld the Panel's conclusion that the first sentence of Article 5.1 imposes such a very specific "obligation."

4.106 The Majority of the ITC explicitly concluded that the Petitioners' quota recommendation of 105,849 short tons "would exceed the amount necessary to prevent or remedy the serious injury ... . Our economic analysis indicates that such restrictions would be excessive." The President's safeguard remedy, under any reasonable calculation, is below that level of restriction and therefore, "excessive."

4.107 The US position that they do not need to justify the measure before it is imposed nor can the import performance be evaluated after it is imposed, renders Article 5.1 meaningless.

4.108 No document exists in the record of the ITC investigation or the establishment of the safeguard remedy, which demonstrates that the measure imposed by the US President was "necessary." To the contrary, the evidence is that the measure imposed is, in the words of the ITC Majority, "excessive." The United States still has not attempted to point to any evidence to the contrary.

(b) The United States Impermissibly Excluded Mexico and Canada From the Safeguard Measure

4.109 Article 2.2 provides that safeguard measures "shall be applied to a product being imported irrespective of its source." Footnote 1, which addresses the term "Member," is a footnote to the text of Article 2.1. It is not a footnote to Article 2.2, which provides for MFN application of the measure. The Appellate Body in Argentina - Footwear concluded that, by its very terms, Footnote 1 only applies to (i) a "customs union" (ii) that is acting "as a single unit or on behalf of a Member state." Korea sees no basis for concluding that Footnote 1 can be read as two separate provisions. In fact, the only logical reading from the text and its context is that this is a self-contained provision, which applies to a customs union.

(c) The ITC Investigation of Increased Imports, Serious Injury and Causation

(i) Introduction

4.110 Safeguard relief is an extraordinary remedy that must be justified by extraordinary circumstances. Another clear lesson from the jurisprudence is that the safeguard measure is an action against fairly traded imports. Therefore, only strict compliance with the requirements of each and every requirement of the SA can justify a safeguard measure. The emergency and extraordinary nature of the remedy must inform the proper analysis and interpretation of all the requirements of the SA and the GATT 1994. The US argument that the emergency nature is limited to the "measure" and does not apply to the situation investigated is inconsistent with the Appellate Body ruling in Argentina - Footwear.

(ii) Increased imports

4.111 With respect to the increased import requirement in Article 2.1, the Appellate Body in Argentina - Footwear articulated that "not just any increased quantities of imports will suffice." The Appellate Body based its reasoning on the plain meaning of "is being imported," which, being in the present tense, requires that the increase in imports be "present," not "past." It follows directly from this language that the most recent period for which data is available must be examined.

4.112 The United States does not argue that the import data of the last 12 months is not meaningful or that it is not available (after all, the confidential data summarized in the February 16 letter reveals almost a 20 per cent decline over two six-month periods). Rather, the US asserts that US practice is to look at "full years." Korea submits that US practice must be in accord with the SA, not vice versa. Article 4.2(a) provides that "authorities shall evaluate all relevant factors of an objective and quantifiable nature." Clearly, data concerning whether imports increased or declined over the last 12 months of the period is both relevant and quantifiable. Imports had decreased by almost 20 per cent in the most recent 12-month period prior to the ITC determination according to the United States letter of February 16. Relative import trends also declined during the first half of 1999.

(iii) Serious injury

4.113 The fundamental inconsistencies and contradictions among the Commissioners, in the absence of an adequate explanation and reconciliation in the opinions, undermine the adequacy of the ITC Majority's determination in terms of Articles 3 and 4.

4.114 Those disagreements about data were so fundamental that only three Commissioners concluded that serious injury occurred by reason of imports. Three concluded otherwise. There must be an adequate explanation of why and how the Commissioners came to these contradictory conclusions. This is all the more true if the ITC relies on confidential data which the United States does not provide to the Panel.

(iv) Inclusion of data relating to other industries

4.115 The United States argues that there is no evidence in the record that OCTG declines were more severe. While Korea agrees with the United States that both OCTG and line pipe demonstrate the same downward trends, because both are being pulled down by the decline in oil and gas rigs, OCTG dropped much more dramatically. Exhibit 48C tracks the per centage relationship between net shipments of OCTG and net shipments of line pipe. This graph confirms that in 1998 and 1999, OCTG's share of total shipments (of line pipe plus OCTG) drops more dramatically relative to line pipe. This had a great impact on the profitability of the producers which the ITC did not properly separate and consider.

4.116 The ITC's own Staff Report recognizes there was a "collective operating leverage effect." The fact is that the effect does exist and it was documented by the ITC itself.

(v) The industry only experienced a one-year downturn

4.117 This industry had a record industry performance in 1997, continuing into the first half of 1998. A temporary downturn from a peak performance period does not demonstrate that the industry is in a state of "significant overall impairment," particularly in an industry that experiences wide swings in demand and profitability. This industry also kept investing throughout 1998/1999 because it recognized the ebbs and flows of its business and was investing for the next upturn (which had already commenced).

(vi) The ITC should not have found that the industry is being seriously injured when the industry no longer was suffering injury at the end of the period

4.118 What is most relevant is that the line pipe industry was fast recovering. As the Panel held in US - Wheat Gluten, "we consider it essential that current serious injury be found to exist, up to and including the very end of the period of investigation." Korea prepared Exhibit 48D which demonstrates, based on the observations and conclusions of the ITC, the US domestic industry, and industry experts, the strong condition of the US line pipe industry.

(vii) There was no causal relationship

(1) Coincidence of trends

4.119 In Argentina - Footwear (AB), the Appellate Body sustained the Panel's analysis of the causation requirement under Article 4.2(b) "it is the relationship between the movements in imports ... (volume and market share) and the movements in injury factors that must be central to a causation analysis and determination."

4.120 The situation in line pipe presents a case of inconsistent trends - imports began to decline at the same time as domestic industry indicators declined. 1998 was composed of a very strong first half during which the domestic industry indicators maintained their peak performance, and a very weak second half during which indicators declined significantly: As all the Commissioners recognized, the industry's poor health began "in the second half of 1998." This two-period analysis by all six Commissioners contradicts the statement by the United States that "the ITC did not compare data for the first half and second half of 1998."

(2) Other Factors

4.121 The US causation decision did not comply with the standard set forth in the AB report on US - Wheat Gluten. The United States considered only each individual factor of injury because US law provides that the cumulative effect of all the "other" factors or causes of injury cannot be considered.

4.122 This methodology obviously conflicts with Article 4.2(b) because the United States did not consider whether the sum of all the other causes of injury (inter alia (1) the oil and gas crisis which caused consumption to drop dramatically from its high in 1997; (2) the build up of significant excess capacity by the domestic industry (on an annualized basis, domestic capacity increased by 25 per cent in 1999 compared to 1998); and (3) the elimination of export markets and consequent ferocious domestic competition) was so great that the effect of imports was diminished to a level that imports had less than a "substantial" effect. Exhibit 48A illustrates the point.

4.123 The United States improperly attributed injury caused by other factors to increased imports in the remedy recommendation as well. The ITC admits that it was the combined effects of both imports and the oil and gas crisis which caused serious injury and that the remedy recommended was also intended to address the effects of both. Therefore, the remedy is not confined to addressing only the injurious effect of imports.

(viii) Threat of injury

4.124 The Commissioners who found only threat of injury erred principally because they assumed that imports would increase. Since imports had declined for 12 months, such a counterintuitive conclusion had to be substantiated by more than mere "conjecture or remote possibility."

(ix) The United States has not demonstrated "unforeseen developments"

4.125 The ITC was under an obligation to demonstrate in its investigation that the increased imports in this case occurred "as a result of unforeseen developments "and of the effect of the obligations incurred by a Member under this Agreement, including tariff concessions ... ."

4.126 The ITC Report contains no reference to a determination of the "unforeseen developments" which caused the surge in imports of line pipe. The United States cannot, in the course of a Panel proceeding, rehabilitate a finding that was never made.


4.127 The following is the United States' own executive summary of first oral statement:

1. Increased imports

4.128 There was an increase in imports in this case that was "sudden and recent." Imports of line pipe increased on both an absolute and a relative basis. On an absolute basis, imports of line pipe increased in each of the last three years of the period investigated. Imports declined somewhat in interim 1999 (the first six months of 1999), as compared with interim 1998 (the first six months of 1998), but only on an absolute basis. Moreover, imports remained at such high levels in interim 1999 that they exceeded whole-year imports in both 1995 and 1996.

4.129 Imports relative to domestic production followed a similar pattern to absolute import levels, except that there was no decline over the interim periods. On a relative basis imports reached their highest level in interim 1999, when they accounted for 46 per cent of the US line pipe industry's production.

4.130 Korea tries to avoid this clear evidence of a sudden and recent increase in imports by devising its own limited period for measuring imports. By asking the Panel to focus only on the last six months of 1998 and the first six months of 1999, Korea would have the Panel examine a small portion of the import data in a certain way, and ignore the rest of it. Korea can only show a decline in imports in the last six months of 1998 and first six months of 1999 if it examines this period in six-month increments. If the import data for these 12 months are examined in different increments - for example, on a monthly basis - there is no steady decline in imports.

4.131 The facts here are much different from those in Argentina- Footwear. The ITC's decision is consistent with the approach of the Appellate Body in that case. The ITC clearly paid special attention to the most recent import levels and trends, those in 1997, 1998 and interim 1999.

4.132 Korea has failed to meet its burden of making a prima facie case that the increase in imports required by Articles 2.1 and 4.2 did not occur.

2. Serious Injury

4.133 The evidence of a significant overall impairment in the US line pipe industry's condition beginning in 1998 was overwhelming. Serious injury to the industry was clear from an examination of: domestic production, capacity utilization, sales, market share, financial indicators, employment-related indicators, the ratio of inventories to domestic production, and research and development. Korea ignores most of these indicators of serious injury.

4.134 Korea's claims that the line pipe industry's performance indicators were affected by declining OCTG sales does not hold up to scrutiny. Korea's argument rests on two false assumptions: (1) that the largest component of average unit costs for line pipe consists of fixed costs; and (2) that these costs were disproportionately allocated to line pipe because OCTG sales fell to a much greater extent than line pipe sales. Both of these assumptions are unsupported by the evidence in the record before the ITC.

4.135 Korea tries to evade the overwhelming evidence of serious injury by arguing that the US line pipe industry was improving at the end of the period examined. Korea is wrong as a factual matter. It mischaracterizes the import data by claiming that there was "a continuing decline in imports" at the very end of the period. This was not so. Imports in May and June 1999 had risen again to the very high monthly levels of 1998. Korea also relies on announcements of price increases that were mostly made in "late 1999 and early 2000" after the ITC injury investigation was finished, and which are not part of the record before the ITC or this Panel.

4.136 The evidence of serious injury was extensive and Korea has failed to make a prima facie case that the US line pipe industry was not seriously injured.

3. Causation

4.137 The ITC's causation analysis was fully consistent with Art. 4.2 and the Appellate Body's decision in Wheat Gluten. The ITC examined the effects of the increased imports, and the effects of other relevant factors, on the domestic industry. By examining and then weighing these effects separately, the ITC distinguished between the effects of increased imports and the effects of other factors, thus ensuring that the effects of other factors were not attributed to the imports.

4.138 The ITC found that the surge in imports and consequent shift in market share from the domestic product to imports occurred at the same time that the domestic industry went from healthy performance to a very poor performance.

4.139 The ITC found that increased imports, together with the import-led price declines, caused domestic producers to lose significant sales, market share, and revenue. This led to declines in other key indicators, such as production, shipments, employment, and operating income.

4.140 Through this analysis, the ITC found that increased imports were an important cause of serious injury and properly established the existence of the causal link between the increased imports and the serious injury, as required by Art. 4.2.

4.141 Korea is wrong in asserting that there was no coincidence in trends between imports and the downturn in the line pipe industry's performance.

4.142 The ITC found that the evidence developed in its investigation suggested that imports had significantly depressed domestic prices. The ITC had three different types of evidence for this: (i) average unit values of imports; (ii) quarterly pricing data which it collected, and (iii) questionnaire responses from a wide range of industry participants. All three of these categories of evidence pointed to the same result. Korea's critique of this evidence of price depression is unpersuasive.

4.143 The ITC examined the effects of six factors, other than increased imports, as possible other causes of serious injury. In examining these other causal factors, the ITC distinguished the injurious effects of increased imports from the effects caused by these other factors. It examined whether increased imports were a "substantial cause" of serious injury. A "substantial cause" under US law is "a cause which is important and not less than any other cause." This approach ensures consistency with the guidance on causation provided by the Appellate Body in Wheat Gluten. By examining all of the other factors in this way, the ITC identified the effects of these factors alone, therefore distinguishing those effects from the effects of imports, which were separately considered. Thus, the ITC ensured that it did not improperly attribute to imports any injurious effects caused by other causal factors. Through this process, the ITC also established that the causal link between the increased imports and the serious injury was genuine and substantial.

4. Threat

4.144 Korea's arguments challenging the determination of the two ITC Commissioners who found a threat of serious injury are based on a misstatement of the facts. The determination of the two Commissioners finding threat was based on facts in the record before the ITC, not on mere allegation or conjecture, as Korea claims.

5. Putting the Safeguard Measure in Context

4.145 The United States has already described the domestic industry's decline into uniformly poor financial performance. Some additional facts serve to put the line pipe safeguard into perspective. Korea accounted for 70 per cent of the total increase in imports in 1998. Imports from Korea also increased in the first half of 1999, as compared with the same period of 1998, in spite of declining demand in the US market. Korean line pipe was imported at exceptionally low prices - much lower than those charged by US producers and most other import sources.

4.146 These facts demonstrate that the United States complied with Article 5 in that it did not apply the safeguard measure "beyond the extent necessary." It guaranteed imports a presence in the US market, since the 9000 ton exemption for each country would allow the import of a substantial quantity of line pipe with no supplemental duty. The 19 per cent supplemental duty was at a level commensurate with the decline in US producers' prices in the first six months of 1999. Moreover, even with the addition of the duty, 1999 unit values for imports would not rise to pre-1999 levels.

6. Korea has Failed to Establish that the Measure was Applied Beyond the Extent Necessary

4.147 Korea has not presented any evidence relevant to determining whether the line pipe safeguard is "commensurate" with the goals of Article 5.1 - remedying serious injury and facilitating adjustment. This text establishes that the condition of the domestic industry is the benchmark for the application of a safeguard measure. It is also significant that this limit affects the extent to which a Member may "apply safeguard measures." Since Article 5.1 applies to "measures," and not the separate components of a measure, consistency with Article 5.1 can only be analyzed with reference to the measure as a whole.

4.148 Korea compares the line pipe safeguard chosen by the United States with a TRQ recommended by three ITC Commissioners. However, the fact that one potential safeguard measure falls within the Article 5.1 limit does not mean that changing one aspect of the measure would push it beyond the limit. For example, suppose a four-year tariff of 30 per cent was found to be commensurate with the goals of Article 5.1. A 40 per cent tariff might be able to achieve the same goal in three years. Both would be permissible under Article 5.1, first sentence.

4.149 Finally, Korea simply ignores certain aspects of the line pipe safeguard, such as its duration and the size of the supplemental duty. In so doing, it has failed to demonstrate anything about the measure as a whole and, thus, provides no basis to even apply the relevant standard.

7. Korea has Failed to Justify Application of Quota Disciplines to the Line Pipe Safeguard

4.150 The principles of Article XIII that are incorporated into the Safeguards Agreement are the only provisions that are applicable to safeguard measures. The object and purpose of the Safeguards Agreement is to create a "comprehensive agreement." In so doing, it incorporates principles - and even one entire block of text - from GATT Article XIII. It omits the provisions of Article XIII that Korea now relies upon. To conclude now that Article XIII applies to safeguard measures would be to reverse the Members' decision to include only some of those provisions in the Safeguards Agreement. The Panel simply does not have the mandate to do this.

8. Exclusion of Canada and Mexico from the Line Pipe Safeguard

4.151 Korea argues that footnote 1 of the Safeguards Agreement applies only to customs unions. If the drafters had intended this result, the footnote would have cited only to subparagraph 8(a) of Article XXIV. Paragraph 8, covers customs unions under subparagraph (a) and free trade agreements under subparagraph (b). Therefore, it is logical to conclude that the citation to Article XXIV:8 in the last sentence of footnote 1 means that provision applies to both customs unions and FTAs.

4.152 Korea argues that the location of the sentence does not make sense if it applies to free trade areas. The United States disagrees. The first three sentences of footnote 1 deal with the basic question of the relationship between Article XXIV and the Safeguards Agreement, as applied to customs unions. When the drafters chose to address Article XXIV as it affects both customs unions and free trade areas, it made sense to put it with other provisions dealing with that topic.

9. Korea's Request for Confidential Information

4.153 Upon further review of Korea's arguments, it is apparent to the United States that Korea has not shown any need for the Panel to examine additional pricing data to determine the consistency of the ITC's determination with the Safeguards Agreement. To the extent that any comments in the United States' first submission suggest otherwise, the United States wishes to correct the record as to the its view.

4.154 Korea's contention that the Panel needs to examine additional price information is mainly predicated on an isolated statement made in the dissenting views of Commissioner Crawford that underselling was not any more prevalent during 1998 and interim 1999 than in earlier periods. (ITC Report at I-71.) But, regarding the fact upon which the ITC actually relied with respect to prices - even Commissioner Crawford specifically acknowledged that there was persistent and widespread underselling. She simply placed less emphasis on that fact.

4.155 A careful reading of the exact passages in Korea's brief which form the basis for its request for additional pricing data shows that Korea is actually asking the Panel to draw different factual conclusions from those drawn by the ITC. Korea has no basis other than conjecture to assert that the Panel needs to conduct a review of information in the confidential record to ascertain whether Korea's unsupported allegations possess any merit. The complete version of the US oral statement for the second session of the first panel meeting contains a point-by-point refutation of Korea's basis for urging that pricing data from the confidential record is necessary.

4.156 In a final effort to convince the Panel of the need to obtain confidential pricing data, Korea quotes a statement in the post-hearing brief it submitted to the ITC. The statement addresses a disagreement among the interested parties in the administrative proceeding as to whether the size of the margins by which imports undersold domestic products increased during 1998. Korea has not disputed the prevalence of underselling - the specific fact about prices that is relevant to the Commission's findings. The Commission did not mention or rely on any increases in the size of underselling margins as a basis for its finding that imports depressed domestic prices. Thus, Korea has failed to show that the Panel needs to see confidential data to review Korea's challenge to the Commission's findings and conclusions relating to pricing.


4.157 The following is Korea's own executive summary of its second written submission:

1. Preliminary Legal Issues

(a) Confidential Information.

4.158 Korea and the Panel still lack fundamental information that has been withheld by the United States for reasons of confidentiality.

4.159 The United States consistently has dismissed Korea's requests as unnecessary. However, the fragmentary data actually produced by the United States has confirmed just the opposite:

(1) The non-confidential summary of imports in the ITC Determination does not accurately reflect the actual import levels in 1998 and 1999, as demonstrated by the US 16 February letter.

(2) The information provided by the United States concerning Geneva Steel is incomplete and thereby misleading.

(3) The information provided by the United States in its 23 April letter concerning Lone Star similarly confirms a far different situation than previously described by the United States.

4.160 Finally, the pricing data provided by the United States in its 23 April letter remains fragmentary due to the confidentiality rules employed by the United States. Nonetheless, the data still confirm, that underselling was a market condition.

4.161 The data available confirms the need for the following additional information:

(1) The confidential Economic Memoranda used to evaluate the remedy proposals and the impact of various alternatives on the US industry. (See below).

(2) The papers used in the deliberative process by the President in reaching the determination regarding the safeguard measure.

(3) The confidential version of the ITC Staff Report, providing fuller explanations for the condition of the industry.

(b) The Panel Should Reach the Issues Raised by Korea With Respect to Both the US Investigation as Well as the Safeguard Measure

4.162 With respect to issue judicial economy, Korea urges the Panel to exercise its discretion to reach the issues raised regarding the safeguard measure even after finding errors in the ITC investigation, due to a considerable on-going impact of the US measure on trade.

(c) Standard of Review

4.163 Korea is requesting that the Panel, pursuant to Article 11 of the DSU, and the Appellate Body decision in US - Lamb Meat, conduct an "objective assessment of the facts."

(d) The Panel Should Reject the US Objections to Extra-Record Information Based on the Decision of the Appellate Body in US - Lamb Meat

4.164 Korea would like to supplement its earlier arguments on this issue with the recent holding of the Appellate Body in US - Lamb Meat, recognizing that a "WTO Member is not confined merely to rehearsing arguments that were made to the competent authorities ... ."

Continuation: 2. Legal Arguments Return to Index of WT/DS202/R